On December 31, 2023, XYZ Co. sold inventory that cost $120,000 to ABC Company for a note requiring three payments of $80,000 (including interest) annually on December 31. The first payment is to be made on December 31, 2023. Assuming that a market interest rate of 5% applies to this contract:

1. Prepare the journal entry to record XYZ's sale of inventory on 12/31/23.

2. Prepare the journal entry to record XYZ Co's receipt of a payment on December 31, 2025

3. XYZ should report gross profit for this sale in December 2023 of

4. Total interest revenue earned over the life of the note is

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